The goal of the Section on Drosophila Gene Regulation is to understand the regulation of homeotic gene function in Drosophila. The homeotic genes specify segmental identities in Drosophila at both the embryonic and adult stages. They encode homeodomain-containing transcription factors that control cell fates by regulating the transcription of downstream target genes. The homeotic genes are expressed in precise spatial patterns that are crucial for the proper determination of segmental identities. Both loss of expression and ectopic expression in the wrong tissues lead to changes in segmental identities. These changes in identity provide a powerful assay to identify the trans-acting factors that regulate the homeotic genes and the cis-acting sequences through which they act. Both the homeotic genes and the trans-acting factors that regulate them are conserved between Drosophila and man. In addition to many conserved developmental genes, at least half of the disease and cancer-causing genes in man are conserved in Drosophila, making Drosophila a very important model system for the study of human development and disease. [unreadable] Cis-acting transcriptional regulatory elements from the homeotic genes have been previously-identified by assays in transgenes in Drosophila. These assays have identified both tissue-specific enhancer elements, as well as cis-regulatory elements that are required for the maintenance of activation or repression throughout development. While these transgene assays have been important in defining the structure of the cis-regulatory elements and identifying trans-acting factors that bind them, their functions within the contexts of the endogenous genes is still not well understood. We have used a large number of existing chromosomal rearrangements in the Sex combs reduced homeotic gene to investigate the functions of the cis-acting elements within the endogenous gene. Characterization of the chromosomal rearrangements revealed that two genetic elements about 70 kb apart in the Sex combs reduced gene must be in cis to maintain proper repression. When not physically linked to each other, these elements interact with elements on the homologous chromosome and cause derepression of its wild-type Sex combs reduced gene. Using a transgene assay, we have identified candidate fragments of DNA that may correspond to these regulatory elements. We are currently attempting to delete these elements from the endogenous Sex combs reduced gene by targetted gene replacement. Maintenance of repression from the homeotic repression elements also requires the proteins encoded by the Polycomb group genes. Genetic studies have also identified the trithorax group of genes that are required for expression or function of the homeotic genes. In order to identify new Polycomb group repressors and trithorax group activators, we are screening for new mutations with homeotic phenotypes. We have isolated two dozen new mutations with homeotic phenotypes, including alleles of several known Polycomb and trithorax group genes. In addition, we have isolated three mutations in the rhinoceros gene, which encodes the Drosophila homolog of a human transcriptional co-activator that physically interacts with the von Hippel-Lindau tumor suppressor protein. We have also isolated seven alleles of a novel gene required for expression or function of the Sex combs reduced gene and for suppression of melanotic tumor formation in Drosophila.